- 14,809
As 1099 statements will start hitting I'd like to go over taxes and being either independent or a 1099'd independent contractor.
As someone who's gotten themselves jammed with taxes in the past due to horrible advice I'm on a lovely monthly payment program with the IRS and have spent oh......about 15 total hours with them on the phone. Although I'm not a CPA I can guarantee you I'm correct about what I post.
PLEASE save money out of your checks for taxes. 30% is a good figure. If you're not saving you'll be jammed up pretty hard come April.
What will you owe? Everything's based on your 1099's. I was told once that if, for example, I got an advance of $8,000 in the month of December that since the money hasn't been earned yet I don't have to claim it. 100% false. If your 1099 says $85,000 then you'll owe taxes on $85,000. If crap ends up falling off the books that will be adjusted in your next year's 1099.
You also MUST file quarterly taxes - not yearly. This is the single biggest mistake I see people making: http://www.allbusiness.com/business-planning/business-structures-sole-proprietorships/1028-1.html
http://www.irs.gov/businesses/small/article/0,,id=110413,00.html
*But I was told I don't have to file quarterly - yes you do
*My CPA told me I don't need to file quarterly - fire him
*My brother-in-law is a tax expert and he says I don't have to file quarter- he's wrong yes you do.
*I've been filing yearly for years and no one's said a word - fine, but you can still get caught. I go 10 miles over the speed limit on the beltway but if I get pulled over I'll get a ticket.
Forms you'll need:
1040
Schedule C - where you deduct expenses
Schedule SE - your self-employment tax
Unfortunately, if you're woking from home you don't have a lot of expenses. Lead costs, office supplies and that's about it unless you drive to see clients and take a gas deduction.
As someone who's gotten themselves jammed with taxes in the past due to horrible advice I'm on a lovely monthly payment program with the IRS and have spent oh......about 15 total hours with them on the phone. Although I'm not a CPA I can guarantee you I'm correct about what I post.
PLEASE save money out of your checks for taxes. 30% is a good figure. If you're not saving you'll be jammed up pretty hard come April.
What will you owe? Everything's based on your 1099's. I was told once that if, for example, I got an advance of $8,000 in the month of December that since the money hasn't been earned yet I don't have to claim it. 100% false. If your 1099 says $85,000 then you'll owe taxes on $85,000. If crap ends up falling off the books that will be adjusted in your next year's 1099.
You also MUST file quarterly taxes - not yearly. This is the single biggest mistake I see people making: http://www.allbusiness.com/business-planning/business-structures-sole-proprietorships/1028-1.html
http://www.irs.gov/businesses/small/article/0,,id=110413,00.html
*But I was told I don't have to file quarterly - yes you do
*My CPA told me I don't need to file quarterly - fire him
*My brother-in-law is a tax expert and he says I don't have to file quarter- he's wrong yes you do.
*I've been filing yearly for years and no one's said a word - fine, but you can still get caught. I go 10 miles over the speed limit on the beltway but if I get pulled over I'll get a ticket.
Forms you'll need:
1040
Schedule C - where you deduct expenses
Schedule SE - your self-employment tax
Unfortunately, if you're woking from home you don't have a lot of expenses. Lead costs, office supplies and that's about it unless you drive to see clients and take a gas deduction.